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Car insurance costs rise with many drivers hit with loyalty penalty

By on July 20, 2022 0

The cost of auto coverage hit its highest level in a year after drivers saw the biggest increase in average premiums since the pandemic.

Average premiums in the second quarter of the year reached £554, the highest since the start of 2021, according to Confused.

This is an increase of £32 – or 6% – on the same period a year ago – the biggest increase since before the pandemic hit, according to the comparison website.

Car insurance now costs £25 more on average than it did at the start of the year in another squeeze on motorists’ budgets during the cost of living crisis, Confused says.

Biggest rise in car insurance prices since Covid-19: A £32 year-on-year rise in average premiums in the second quarter of 2022 is the biggest jump since the pandemic, says a report

The average price of a car policy at the end of June is the highest since the first quarter of last year, when prices were £522.

While the £32 rise is the biggest since the pandemic, the price paid for car cover is still well below the pre-Covid average of £770 at the end of March 2020.

The comparison site says loyal customers have been hardest hit over the past three months, having seen their average renewal prices rise compared to those taken out by new policyholders.

A survey of 2,000 UK drivers found that almost half of those who received their renewals in the second quarter of 2022 saw their price rise by £41, £9 more than the average rise in car insurance costs .

And this despite the fact that one in 10 drivers who have renewed their car insurance since January 2022 believe prices will not rise after the Financial Conduct Authority imposed strict transparency guidelines on renewals earlier this year. .

However, while prices are also rising for new policies, data shows that drivers could still save money by shopping around and purchasing a new policy.

In fact, those who shopped around after receiving a higher renewal price saved £54, on average, after using a price comparison website and switching insurers.

With inflation and the cost of living on the rise and fuel prices still at staggeringly high levels, drivers are rightly concerned that increased car insurance will add to the wider financial crisis, said Confused.

Chief Executive Louise O’Shea says drivers should also be aware that recent FCA changes do not always mean a cheaper or similar renewal price, as any increase in average UK car insurance costs will be reflected in the renewal. premiums.

And prices are likely to continue to rise as motorists spend more time on the road, meaning the likelihood of claims will also increase.

However, with the cost of living crisis worsening and further household bill hikes expected later in the year, drivers need to be savvier than ever.

“With millions stung by the current cost of living, it can be disheartening to see auto insurance prices also on the rise,” O’Shea said.

“As the latest data shows, we are seeing the largest price increase since before the pandemic. As we are all still adjusting to post-lockdown life, it is likely that this is due to the increasing number of insurance claims as we return to some kind of routine.

“Unfortunately, this means you may notice a price increase when renewing or purchasing your auto insurance.”

Car insurance now costs £25 more on average than it did at the start of the year in another budget squeeze for motorists during the cost of living crisis, according to

Car insurance now costs £25 more on average than it did at the start of the year in another budget squeeze for motorists during the cost of living crisis, according to

Which drivers are seeing the premium increase the most – and who is paying LESS than last quarter?

Data from Confused – which is based on six million insurance quotes provided to motorists each quarter – shows female drivers have seen their prices rise less than men, with prices rising by £28 and £34 respectively on average in the course of the last 12 months.

This means women now pay £492 on average, while men pay £591 in comparison.

Regionally, year-on-year prices rose for drivers in all parts of the UK – although there were some marginal declines in the first to second quarter.

For example, drivers in the south of England are now paying £6 less than those shopping in the last quarter, while prices in the East Midlands have fallen by £5 in the last three months. Both are 1% declines from the end of March.

However, year over year, some drivers have seen their prices increase by up to 12% on average.

In Northern Ireland, prices climbed £64 year-on-year to £594, while those in Inner London are paying £74 more than in the second quarter of 2021, with average premiums now reaching £882.

It’s a similar picture across all age groups, with some motorists paying less now than three months ago.

In particular, 32-year-olds have seen the biggest drop in prices over the last quarter and are now paying £21 less, a 3% drop. This is despite a price increase of £46 (7%) over the year. Drivers of this age now pay £692 on average.

Similarly, 19 and 30 year olds have seen their prices fall in three months, with premiums dropping by £14 and £12 respectively on average.

However, drivers in their early 20s have seen a significant price increase, with some paying nearly £100 more than 12 months ago.

In particular, 21-year-olds are paying £98 more year-on-year, with the average premium now standing at £1,205.

Meanwhile, 20-year-olds are paying £1,288 after jumping £92 in the 12 months.

It’s not the highest price paid: 18-year-olds shell out £1,453.

Confused says prices for young motorists only fall below £1,000 for drivers over 24.

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